Intellectual Property and Contract Law for the Information
Age:

Foreword to a Symposium

Article 2B of the Uniform Commercial Code[1]
(Article 2B) is a recently drafted model law that aspires to provide a standard
set of rules that will regulate transactions in information products and
services. It therefore seeks to do for the information economy what Article 2
of the current Uniform Commercial Code (U.C.C.) has done for the manufacturing
economy and commerce in goods.[2]Article 2B may soon be submitted to state legislatures for enactment into
state law.[3] Future United States proposals for
global electronic commerce rules might also be based on its rules.
[4] Article 2B could thus become the world's
preeminent law regulating transactions in information.

Transactions in information comprise a significant portion of both the
national and the international economies. According to the Clinton
administration's A Framework For Global Electronic Commerce, the United
States exports well over $40 billion worth of information products and services
every year.[5] Internet commerce alone could total tens of billions of dollars by the end
of the century.
[6] Given the volume of the commerce that Article
2B would regulate, its effect on national and international economies could be
profound.

The task of drafting a model law to govern transactions in information is
daunting for a number of reasons. First, a wide array of industries engage in
information transactions, which makes meeting their varied needs difficult.
Article 2B would affect the divergent transactions into which these industries
enter, such as the licensing of computer software and trade secrets,
[7] contracts between writers and their publishers,
[8] and database access agreements.
[9] Parties to each of these types of transactions
have different historic licensing practices and assumptions.[10] For example, trade secret licensors are concerned
principally with ensuring that licensees maintain strict controls over leakage
of the licensors' information.[11] In
contrast, writers are more concerned with getting credit for their work and
ensuring that derivative market segments are available for licensing the reuse
of that work.[12]

Differences in how information is licensed flow from the different purposes
of these licensors. Finding common threads in these transactions from which to
weave a set of uniform rules is a considerable challenge.

Second, many of the market assumptions upon which Article 2B's drafters relied
necessarily rest on risky predictions about the future of information age
commerce. Article 2B would apply not only to commerce occurring in mature
markets, but also to forms of electronic commerce that are immature, emerging,
or yet to be developed.
[13]

Article 2B anticipates, for
example, marketplaces in which electronic agents representing prospective
licensors and licensees of information will meet in cyberspace and form
enforceable contracts by exchanging messages on acceptable terms and
conditions.[14]It is far from
clear, however, that electronic agent technology will be the major means by
which electronic contracts will be formed in the future.[15] The immaturity of the markets that Article 2B would
regulate and the immaturity of the information technologies that will enable
such markets to flourish contribute to the difficulties involved in drafting an
adaptable, technology-neutral set of rules. Any legal rules that depend on the
state of an existing technology--or anticipate the widespread use of a
technology that is currently immature--risk becoming obsolete.[15]

Third, Article 2B must successfully mesh with intellectual property law, which
is itself a complex body of law that regulates many aspects of transactions in
information. A successful mesh will not be easy, in part because Article 2B
would allow for the enforcement of contractual restrictions in mass-market
transactions that previously would have been unenforceable, either as a matter
of contract law or as a matter of intellectual property law.
[16] In particular, Article 2B would validate
"shrinkwrap licenses" as a matter of state contract law.[17] "Shrinkwrap licenses" are pre-printed forms,
self-designated as "licenses," that appear under the plastic wrap of a box, or
inside a box of prepackaged software. While the software industry often uses
shrinkwrap licenses in its mass-market transactions, contract cases generally
have held that such "licenses" are proposals for amending a contract of
sale that was formed when a consumer paid for the software at the store,[18] not part of the contract of sale to
which the consumer assented when he or she opened the shrinkwrap. Courts
therefore generally hold that the terms contained in such shrinkwrap licenses
are unenforceable because the consumer never assented to them.[19] Even when state law expressly validates shrinkwrap
licenses, federal courts have sometimes refused to enforce license terms that
would interfere with federal intellectual property purposes and policies.[20] Some commentators expect, however, that
under an Article 2B regime, these licenses and the terms contained therein
would override intellectual property rules that would otherwise apply.[21]

The drafters of Article 2B recognize the potential for conflict between
federal law and Article 2B licenses and have announced a "neutral" stance
toward federal preemption issues.
[22] Some commercial law specialists have predicted that Article 2B will
entirely displace intellectual property law.
[23] Even if these predictions are not borne out,
Article 2B is likely to have a substantial impact on intellectual property law
and transactions in information products and services.

Although Article 2B has been subjected to intense scrutiny in the hothouse of
the drafting committee, there has been relatively little investigation of the
intersection between Article 2B and intellectual property law.
[24] Hundreds of years of regulating transactions in information has provided
intellectual property law with some collective economic and social wisdom that
the drafters of Article 2B would do well to contemplate, especially as that
wisdom pertains to the protection of societal interests in ongoing innovation.
It is arguable that the drafters of Article 2B have not paid enough attention
to that wisdom.

Recognizing the importance of successfully managing the intersection between
Article 2B and intellectual property law, the Berkeley Center for Law &
Technology hosted a conference on April 23-25, 1998 to consider the
implications of Article 2B for intellectual property law, commercial
transactions in information, and electronic commerce.[25] The Conference featured presentations by intellectual
property and commercial law scholars, economists, technologists,
representatives of various information industries, and attorneys specializing
in information industry transactions.[26]

The Articles and Comments contained in this Symposium, along with those
contained in a companion issue of the Berkeley Technology Law Journal,[27] were presented at the Berkeley Conference.
These papers offer guidance for several audiences and purposes: the drafters of
Article 2B as they refine their product for final approval and adoption into
state law; state legislatures and courts as they consider and attempt to
interpret Article 2B's provisions; policymakers attempting to build global
consensus on contract rules for an information economy that is far less
dependent on territorial bounds than was the manufacturing economy; and
practicing lawyers dealing with the implications of Article 2B for their own
and their clients' businesses. What follows is a brief synopsis of the themes
and major contentions developed in these papers.

Contract and copyright law may have lived in harmony for centuries, but as
David Nimmer and his colleagues Elliot Brown and Gary Frischling colorfully
assert, this "harmony is not the end of the symphony."
[29] Nimmer says that contract law works best
when it complements copyright law to enable the successful exploitation of
copyrights. Copyright doctrine also looks to contract law for answers to
questions of copyright significance, such as who is an "employee" for the
purposes of determining ownership rights in an original work under copyright's
work-made-for-hire doctrine.[30] While Nimmer praises Article 2B for addressing many commercially important
questions on which prior licensing law has regrettably been silent,[31] he views Article 2B as "an unwelcome
intermeddler" insofar as it aspires to protect the interests of copyright
proprietors and insofar as it enables licensors to disrupt the "delicate
balance" long embodied in copyright law.[32]

Nimmer's quarrel is not so much with the enforceability of mass-market
shrinkwrap licenses as a matter of state contract law, although he notes that
several federal cases have refused to enforce license restrictions of the sort
Article 2B would ratify.[33] Nimmer's quarrel
is instead with the drafters of Article 2B's apparent indifference to the
prospect of information industries using mass-market licenses to undermine user
rights and other federal copyright policies.

Nimmer also questions whether the drafters of Article 2B are really as neutral
on the subject of federal preemption as they profess.[34] "[T]he draft," he says, "is only `neutral' where it
chooses to be."[35] Article 2B's selective
neutrality "suffers from the same shortcoming of political neutrality in
response to real-world conflict. De facto, it favors those with concentrated
interests and large financial resources and thus tacitly invites abuses."[36] Given that Article 2B makes difficult policy
choices about other important issues, for example, favoring the contraction of
user rights over the public's right to make fair use of materials,[37] Nimmer thinks that it should also say
something substantive about federal intellectual property policy preemption.[38]

In addition, Nimmer takes aim at the chief precedent upon which the
anti-preemptionists among Article 2B's proponents will rely, which is Judge
Frank Easterbrook's analysis of copyright preemption in ProCD, Inc. v.
Zeidenberg.[39] Nimmer argues that Judge
Easterbrook not only misinterpreted the copyright preemption provision his
opinion addresses, but that he also ignored the "conflict with federal purpose"
line of copyright preemption cases.[40] Relying on this important line of cases, Nimmer argues that federal
preemption is the appropriate response to contracts that purport to recalibrate
and defeat the copyright balance.[41] Nimmer
also offers an analytical framework to help determine when contract terms
should be preempted.[42]

As eloquent as Nimmer is in articulating his position, he surely would admit
that he was not the first copyright scholar to raise concerns about Article
2B's potential to disrupt the copyright balance. Professor Charles McManis was
an early champion of these concerns. During an American Law Institute (ALI)
oversight meeting about Article 2B in the spring of 1997, McManis made a motion
to recommend an amendment to the mass-market license provision of Article 2B.[45] This motion would have made it clear that
Article 2B licenses could not be used to override fair use or other specified
copyright policies limiting the rights of copyright owners.
[46] In his Comment, McManis further elucidates his concerns about the
phenomenon to which the title of his Comment--The Privatization (or
"Shrink-Wrapping") of American Copyright Law--so pointedly hints.[47]

McManis notes that there is nothing in Article 2B that would prevent book
publishers and other content providers from using techniques similar to the
ProCD shrinkwrap license to obtain waivers of user rights under
copyright law.[48] He regards Article 2B as
currently inviting copyright owners to "have their cake and eat it too" at the
expense of consumers.[49] Both McManis and
Nimmer find this result unacceptable.[50]

In contrast, Joel Wolfson, General Counsel at Nasdaq, criticizes both the
Nimmer proposal and the McManis Motion.[51]

Wolfson fears that both proposals would have unintended ill consequences
for some of today's leading information industries.[52] He points out that much of the valuable information being
traded in commerce consists of data compilations that cannot be protected by
copyright law in the aftermath of the Supreme Court's decision in Feist
Publications, Inc. v. Rural Telephone Service Co.[53] According to Wolfson, leading information industries can
now protect their data from misappropriation only by using standard form
contracts,[54] which he thinks that the Nimmer and McManis proposals would effectively
nullify.[55] Wolfson argues that such
nullification would threaten the viability of leading information industries,
especially given Congress' inaction on both the Collections of Information
Antipiracy Act[56] and similar legislation
that would adopt a European-inspired form of intellectual property protection
for the contents of databases.[57]

Wolfson also gives examples of situations in which it is reasonable for
information providers to require licensees of their data to waive their fair
use rights.[58] In addition, he suggests that Congress should provide any needed
clarification about the supremacy of copyright policy regarding licenses of
information under Article 2B.[59] Wolfson
insists that it is inappropriate to use state contract law to define the
boundaries of federal copyright policy.[60]

McManis contends that accepting his motion would not open the jaws of
preemption as wide as Wolfson claims.[61] As McManis points out, the Supreme Court has defined some domains in which
state laws can protect information and information products.[62] Other domains are off-limits, either because Congress has
acted in a manner that leaves no room for states to act in that arena, or
because a particular state action would interfere with Congressional
objectives.[63] McManis says that if the
substance of his ALI motion became part of Article 2B, licenses regarding uses
of information--such as those with which Wolfson is concerned--would "arguably
[be] unaffected."[64]

McManis also questions whether copyright policy issues that relate to contract
law should be left entirely to Congress.[65]
According to McManis, state legislatures considering Article 2B--with or
without amendments such as the McManis Motion--will be in the thicket of
copyright policy making.[66] Moreover, state
courts will be unable to avoid copyright policy questions because disputes
between licensors and licensees will present them directly.[67] Since state legislatures and courts will inevitably have
to deal with copyright policy issues, McManis argues that Article 2B's drafters
should provide some guidance regarding the relationship of Article 2B to
copyright law and policy.[68]

As noted above, Nimmer, Wolfson, and McManis anticipate that the bulk of the
action pertaining to the complex contract-intellectual property relationship
will arise in the context of preemption challenges to the enforcement of
contracts. Professor Mark Lemley, however, asserts that it will be necessary to
go, as the title of his Article evocatively indicates, beyond preemption.[70] Lemley observes that Article 2B would
encompass some forms of intellectual property protection--notably trade secrecy
law--that derive from state, rather than federal, law.[71] Since preemption arises only in cases in which there is a
conflict between state and federal law, it provides no guidance for
cases in which one state law conflicts with another.[72]

Moreover, Lemley notes that the federal case law contains several discrete
types of preemption and only copyright law has an explicit statutory provision
regarding preemption.[73] He also argues that
the vagaries of court interpretations of that statutory provision are
troublesome.[74]

Succinctly put, Lemley thinks that the law regarding the federal preemption
of state intellectual property law and policy is "a mess."[75]

Although Lemley expects case law to develop on Article 2B preemption issues,
he does not think that preemption should be the sole point of inquiry regarding
the intersection between Article 2B and intellectual property law and policy.[76] Lemley explores other doctrines that might
be used to challenge Article 2B licensing terms and to inject policy balances
similar to the ones that now occur in intellectual property cases.[77] One of the most promising of these doctrines
is that of misuse. This doctrine has evolved over many decades as a way to keep
owners of intellectual property rights from leveraging their government-granted
monopoly rights in a manner that allows them to acquire unjustifiable
advantages in dealings with customers or competitors.[78] The misuse doctrine has been successfully applied in
cases involving patent and copyright licensing,[79] which augurs well for applying it to deter licensor
overreaching.

Like Nimmer and McManis, Lemley expects intellectual property policy to take
on the flavor of a consumer protection statute as it relates to Article 2B.
[80]

Lemley believes, however, that it is at least as important for intellectual
property policy to ensure that Article 2B licenses do not stifle subsequent
innovation that might build upon information licensed under Article 2B.[81]

While a contractual waiver of the right to reverse-engineer a mass-marketed
information product may seem to be of little interest to the ordinary consumer,
Lemley argues that consumers will suffer in the long run if no one can
reverse-engineer existing products or use the fruits of such knowledge to
develop new products.[82]> Lemley says that "[i]ntellectual property rules may not be pretty, but they
are at least an effort to arrive at the right balance of incentives, an effort
that would never even be made were we to leave social ordering entirely in the
hands of private parties."[83] He argues that this balance would be upset by the enforcement of Article 2B
licenses that bar reverse-engineering of mass-marketed information products.

Professor Rochelle Cooper Dreyfuss raises very similar concerns about Article
2B's impact on the innovation policy underlying trade secrecy law.[85] She observes that Article 2B's
"concentration on exploitation leads to a somewhat cavalier dismissal of
`upstream' (i.e., creative) issues . . . [and] may
frustrate . . . innovation by undermining a core federal
premise, which is that information `leaks;' that it flows inevitably into the
domain of the public."[86] Dreyfuss suggests
that allowing appropriate leakage of information is as important to state trade
secrecy law as it is to federal patent and copyright law.[87]

Dreyfuss expresses other concerns about some of Article 2B's implications for
trade secrecy licensing. If patent licensing involves sufficiently different
assumptions and practices from other licensing to warrant an exception from the
scope of Article 2B, Dreyfuss asks why this is not equally true for trade
secrecy licensing.[88] She notes that
Article 2B will cover virtually all licensing in trade secrets, but that the
text of Article 2B adopts some rules that make no sense in relation to trade
secrets, such as the rule requiring licensors to provide refund rights to
licensees under some conditions.[89] Article
2B also invents a new vocabulary and introduces several key distinctions that
will be unfamiliar and potentially troubling to trade secret licensing
specialists.[90] Moreover, Dreyfuss points out that the most central term of Article
2B--"information"--is defined in a manner that conflates concepts that have
distinct meanings in trade secrecy and other intellectual property laws.[91] She also observes that the explanatory
notes to Article 2B contain curiously few references to trade secrecy statutes
and cases involving trade secrecy licensing.[92] Dreyfuss attributes Article 2B's relative deafness to
the sensitivities of trade secrecy law to the relatively late inclusion of
trade secrecy licensing in the Article 2B drafting process.[93]

Dreyfuss, however, seems more sanguine than does Nimmer about Article 2B's
potential to take on functions similar to those of intellectual property law.[94] Indeed, she believes that Article 2B may help to fill a gap in the existing
framework of intellectual property law, which currently underprotects
investments in subpatentable and subcopyrightable informational works, such as
the commercially valuable Nasdaq data about which Wolfson expresses concern.[95] This prospect does not make Dreyfuss uncomfortable as long as Article 2B
does not suffocate the ongoing process of innovation.[96]

While intellectual property lawyers tend to focus exclusively on how
intellectual property law affects incentives to invest in socially desirable
information products and services, Professor Peter Alces makes it clear that
other rules are also important. For example, rules setting quality standards
for information products--such as the software warranty rules proposed in
Article 2B[98]--also affect investment
incentives.
[99] Setting very high warranty standards could deter investments in products or
services because the risks of liability for developers may be too great.[100] Conversely, setting very low warranty standards can harm market growth in
the long run if such standards lead consumers to have too little faith in the
products or services that such standards cover.[101] According to Alces, in designing warranty standards,
policymakers must find a "delicate balance" between providing sufficient
incentives for developer investment on the supply side and providing enough
quality assurance to induce consumer investment on the demand side.[102]

Alces suggests that striking such a balance is easier when legislation is
"bilateral"--that is, when relatively large and sophisticated players routinely
participate in both sides of the transactions being regulated.[103] He thinks, however, that Article 2B is more "unilateral" in character: it
is more favorable to licensors of information and thus biased towards lower
warranty standards, which the industry participants perceive to be in their
interests.[104] Alces pointedly states that
"[c]hange in the law for the sake of personal or corporate gain is not law
reform in the best sense."[105]

Much of Alces' Article explains why raising Article 2B's warranty standards in
relation to computer software is desirable, both from the standpoint of society
and from the standpoint of the software industry.[106] He cites historical analogues to support his warning
that if Article 2B does not adequately protect licensee interests in reasonable
levels of quality, products liability law will probably grow to respond to
licensee concerns.[107] Suppose, for
example, that a firm suffers grievous losses on account of the failure of
"millennium bug" (i.e., the year 2000 problem) detection software. The firm is
unlikely to accept sole responsibility for the losses. If a warranty claim
against the licensor appears difficult to sustain, the firm will probably look
to products liability law to obtain a fair recovery.[108] Alces explains why such a claim might succeed and
argues that "the efforts of the drafters of Article 2B to insulate licensors
from liability may well backfire."[109]

The Berkeley Technology Law Journal is publishing a companion issue to
this Symposium.[111] That issue includes
several papers and comments that were also presented at the Berkeley
Conference.[112] In Breaking Barriers:
The Relation Between Contract and Intellectual Property Law, Article 2B's
reporter Professor Raymond T. Nimmer discusses the commercial importance of
Article 2B licenses for promoting on-line commerce in information.[113] He also explains his views on preemption
and other federal policy intersection issues.[114] In Authors as "Licensors" of "Informational Property
Rights" under UCC Article 2B, Professor Jane C. Ginsburg provides some
"good news" and some "bad news" for authors who license their intellectual
property rights to publishers.[115] Professor Jessica Litman's Tales That Article 2B Tells argues that
Article 2B is "confusing and confused" about copyright and its relationship
with that law.[116] In Copyright and the
Jurisprudence of Self-Help, Professor Julie E. Cohen asserts that copyright
policy should limit the extent to which licensors can use technical protection
systems to enforce licenses.[117] David F. McGowan's Free Contracting, Fair Competition, and
Draft Article 2B: Some Reflections on Federal Competition Policy, Information
Transactions, and "Aggressive Neutrality" examines Article 2B from the
standpoint of federal antitrust policy.[118] Finally, in 2B as Legal Software for Electronic Contracting--Operating
System or Trojan Horse?, Professor Michael Froomkin considers the
technological ripeness of electronic commerce's infrastructure for Article 2B's
regulations.[119]

CONCLUSION

We are currently witnessing the emergence of new forms of commerce in
information and new means by which to distribute it. As a consequence, new
rules governing commerce in information are inevitable. Together, the papers
contained in this issue and the companion issue of the Berkeley Technology
Law Journal provide a rich set of reflections on Article 2B's implications
for intellectual property law and contract law in light of developments in the
information economy. As these papers show, Article 2B will not be alone in
responding to the challenges that developments in the information economy will
bring. Intellectual property law and policy will also be an integral part of
the mix. Both bodies of law must work together if the information economy is to
achieve its full potential.

[dagger] Professor of Law and of Information Management, University of
California, Berkeley. The Articles and Comments contained in this Symposium
were presented at a conference entitled "Intellectual Property and Contract Law
for the Information Age: The Impact of Article 2B of the Uniform Commercial
Code on the Future of Information and Commerce." The Conference was convened by
the Berkeley Center for Law & Technology, and it took place at the
University of California, Berkeley on April 23-25, 1998. I wish to give special
thanks to Laurel Jamtgaard, Mark A. Lemley, and Pat Murphy for their critically
important roles in organizing the Conference. I am also deeply grateful both to
the John and Mary R. Markle Foundation and to Wilson, Sonsini, Goodrich &
Rosati for their generous support of the Conference; to the speakers at the
Conference who provided so much food for thought; to the volunteers who did so
much to get out information about the Conference and otherwise make the event
go smoothly; and to the editors of the California Law Review and the
Berkeley Technology Law Journal for their cooperation and support of the
Conference, and for making the written Symposium a product of which we can all
be proud. I also wish to thank my research assistant Peter Huang for his
invaluable assistance in preparing this Foreword.

[ ]1. As of this writing, the most recent draft
of Article 2B is dated August 1, 1998. [All versions of Article 2B are
available on the Internet. See National Conference of Commissioners on
Uniform State Laws, Drafts of Uniform and Model Acts Official Site (last
modified Sept. 2, 1998) <http://www.law.upenn.edu/library/ulc/ulc.htm>.
The Official Site offers the Article 2B drafts in several file formats,
among which the pagination is inconsistent. In this Foreword and throughout
this issue of the California Law Review, page references are to the
pages as they are numbered in the Acrobat PDF file format. Only the prefaces to
the drafts are cited by page number; all other material are cited by section number. The draft of August 1, 1998 has no page numbers in
its online versions, and therefore the Preface of that draft is cited without
page references. Ed.]

"The UCC has given parties in traditional sales of goods a well-understood
legal framework to establish contract formation, terms, and enforcement rights.
It is timely now to adapt this framework to the digital era and to the new
information products and services that will increasingly drive Global
Electronic Commerce . . . . Article 2B can be a strong
first step toward a common legal framework for digital information and software
licenses."

[ ]3. As of this writing, neither the National
Conference of Commissioners on Uniform State Laws (NCCUSL) nor the American Law
Institute (ALI) has formally approved a draft of Article 2B. As of March 26,
1998, the ALI Ad Hoc Committee on U.C.C. Article 2B considered that the text of
the Article needed "significant revision." See Letter from Geoffrey C.
Hazard to Gene N. Lebrun, President, NCCUSL, and Charles Alan Wright,
President, ALI (Mar. 26, 1998) (memorializing discussion of March 18, 1998
among the ALI Ad Hoc Committee on Article 2B) (visited Sept. 19, 1998)
<http://www.softwareindustry.org/issues/guide/docs/ghmar98.html>. The ALI
has tentative plans to submit a final draft to a vote by its membership on May
19, 1999, and NCCUSL will consider a final draft at its Annual Meeting in the
summer of 1999. According to a joint press release, the two organizations "are
committed to working together toward its completion so that Article 2B will be
available for introductions and adoptions in state legislatures in 2000."
NCCUSL and ALI Announce Schedule for Completion of Uniform Commerical Code
Article 2B: Licensing (visited Sept. 19, 1998)
<http://www.law.upenn.edu/library/ulc/ucc2b/2breleas.htm>. However, on
September 10, 1998, Jack Valenti on behalf of the Motion Picture Association of
America, along with presidents and CEOs of five other copyright industry
organizations, wrote a letter urging the ALI to table the Article 2B project,
characterizing the draft as "fatally flawed in its fundamental premise that all
transactions in `information' may be governed by a single set of contractual
rules." Letter from Jack Valenti, President and CEO, Motion Picture Association
of America, et al. to Carlyle C. Ring, Jr., Chairman, NCCUSL Article 2B
Drafting Committee, and Geoffrey Hazard, Jr., Director, American Law Institute
1 (Sept. 10, 1998) (on file with author). This will likely mean that the scope
of Article 2B will be curtailed, even if the project is not tabled.

[ ]9. See Joel Rothstein Wolfson,
Contract and Copyright Are Not at War: A Reply to "The Metamorphosis of
Contract into Expand," 87 CALIF. L. REV.79(1999).

[ ]10. After representatives of the patent and
trademark licensing communities communicated with the drafters of Article 2B
regarding the representatives' concerns about Article 2B's potential to disrupt
standard licensing practices for patents and trademarks, the drafters omitted
these transactions from the scope of Article 2B. See U.C.C. §
2B-104(2) (Draft, Aug. 1, 1998) (providing exemptions for patent and trademark
licensing not associated with a license otherwise covered by Article 2B);
id. § 2B-104 reporter's note 3 (explaining that part of the basis
for these exemptions is the "many different assumptions and standard practices"
of such industries).

[ ]14. See U.C.C. § 2B-204 (Draft,
Aug. 1, 1998). Article 2B defines "electronic agent" as "a computer program or
other automated means used by a person to independently initiate or respond to
electronic messages or performances on behalf of that person without review by
an individual." Id.

§ 2B-102(a)(19). Such contracts would be
enforceable "if the interaction results in the electronic agents' engaging in
operations that confirm or indicate the existence of a contract." Id.
§ 2B-204(1). This rule would apply "even if no individual was aware of or
reviewed the agent's actions or their results." Id. § 2B-204(4).

[ ]15. See James R. Davis, Intellectual
Property and Contract Law for the Information Age: The Impact of Article 2B of
the Uniform Commercial Code on the Future of Information and Commerce, Remarks
at the Berkeley Center for Law & Technology's Conference (Apr. 25, 1998);
see also Froomkin, supra note 13.

[ ]15. For example, when Congress enacted a
new form of legal protection for semiconductor chips, it decided to protect
"mask works" with which semiconductors were manufactured during the 1980s. As a
result, the Semiconductor Chip Protection Act, 17 U.S.C. §§ 901-914
(1994), has become obsolete. See, e.g., Morton D. Goldberg,
Semiconductor Chip Protection as a Case Study,in GLOBAL
DIMENSIONS OF INTELLECTUAL PROPERTY RIGHTS IN SCIENCE AND TECHNOLOGY, 329, 323
(Mitchel B. Wallerstein et al. eds., 1993).

[ ]19. See, e.g., id. at 104.
But see ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1449 (7th Cir. 1996)
(enforcing a shrinkwrap license). The Seventh Circuit is the only circuit to
have held such licenses enforceable.

[ ]25. The official name of the Conference is "Intellectual Property and
Contract Law for the Information Age: The Impact of Article 2B of the Uniform
Commercial Code on the Future of Information and Commerce." The following
organizations were co-sponsors of the Conference: the American Law Institute;
the Information Technology Association of America; Continuing Legal Education
of the Bar of California; the Business and Law Section of the California State
Bar Association; the School of Information Management and Systems at the
University of California at Berkeley; the Institute of Management, Innovation,
and Organization of the Haas School of Business at the University of California
at Berkeley; and the Fisher Center for Management and Information Technology of
the Haas School of Business at the University of California at Berkeley.

[ ]27. Symposium, Intellectual Property and
Contract Law for the Information Age: The Impact of Article 2B of the Uniform
Commercial Code on the Future of Information and Commerce, 13 BERKELEY
TECH. L.J. (forthcoming Dec. 1998).

[ ]29. Id. at [3]. David Nimmer is the co-author, along with his
now-deceased father Melville B. Nimmer, of a well-known copyright treatise,
Nimmer on Copyright. For the sake of simplicity, the text of this
Foreword will refer to Nimmer alone as author of The Metamorphosis of
Contract into Expand.

[ ]39. 86 F.3d 1447 (7th Cir. 1996). Judge
Easterbrook regarded Zeidenberg as having agreed to abide by the "home use"
restriction in the license accompanying the CD-ROM of telephone directory
listings that Zeidenberg purchased. See id. at 1454. In Judge
Easterbrook's view, breach of that agreement by uploading the listings to a
website distinguished ProCD's contract claim against Zeidenberg from a
copyright claim. See id. at 1454-55.

[ ]43. Charles R. McManis, The
Privatization (or "Shrink-Wrapping") of American Copyright Law, 87 CALIF L.
REV. [] (1999). Professor McManis's Comment was originally prepared as
commentary on Professor Lemley's Article. See Lemley, supra note 16.
However, the substance of the McManis Comment
is more directly relevant to the Nimmer Article and the Wolfson Comment. Thus,
this Foreword discusses the McManis Comment with the Nimmer Article and the
Wolfson Comment.

[ ]56. See id. at [23]; seealso H.R. 2652, 105th Cong. (1998). This Bill has passed the House of
Representatives, see 144 CONG. REC. H3404 (daily ed. May 19, 1998)
(recording passage), but as of this writing, no such bill has been passed by
the Senate.

[ ]57. See European Parliament and
Council Directive 96/9/EC of 11 March 1996 on the Legal Protection of
Databases, 1996 O.J. (L77) 20 (creating a new form of intellectual property
protection for the contents of databases); see also Jane C. Ginsburg,
Copyright, Common Law, and Sui Generis Protection of Databases in the
United States and Abroad, 66 U. CIN. L. REV. 151, 171-76 (1997) (arguing
for a new form of intellectual property protection for databases, such as that
contained in the European database directive); J.H. Reichman & Pamela
Samuelson, Intellectual Property Rights in Data?, 50 VAND. L. REV. 51,
84-95 (1997) (criticizing the European database directive).

[ ]58. See Wolfson, supra note 9, at [6-12]. For example, Dun &
Bradstreet may limit the posting of credit reports in order to protect consumer
privacy, even though this might be permissible as fair use. See id. at
[12].

[ ]63. See, e.g., Bonito Boats, Inc. v.
Thunder Craft Boats, Inc., 489 U.S. 141, 156-57 (1989) (striking down Florida
"plug mold" statute because of its interference with the purposes of the
federal patent law that leaves in the public domain those industrial designs
that do not qualify for patent protection).

[ ]99. See Alces, supra note
97, at [ ]. The arguments in this paragraph
were more forcefully set forth in Professor Alces's oral presentation at the
Berkeley conference than in his written text. See Peter Alces, Remarks
at the Berkeley Center for Law & Technology's Conference, Intellectual
Property and Contract Law for the Information Age: The Impact of Article 2B of
the Uniform Commercial Code on the Future of Information and Commerce (Apr. 25,
1998) [hereinafter, Alces, Remarks].

[ ]103. See Alces, supra note 97, at [20]. For example, because the Ford Motor
Company is a buyer of goods as often as it is a seller, it will be in Ford's
interests to ensure that the rules affecting buyers and sellers are balanced.
]See id. at 20.

[ ]107. See id. at [24-25]. Alces
gives the example of the emergence of strict liability law in cases involving
defective automobiles. See id. at [15-17]. He says that this sort of law
was a response to prevalent automobile industry contracts that greatly
restricted warranty liability. See id. at [23-24].

[ ]108. Seeid. at [27]. Alces
does a nice job explaining how software defect cases are likely to be analyzed
in product liability terms. See id. at [25-30]. Products liability law
may have evolved in the context of manufacturing industries, but that does not
mean that it cannot be adapted to deal with software. See id. at
[27-28].

[ ]110. Symposium, Intellectual Property
and Contract Law for the Information Age: The Impact of Article 2B of the
Uniform Commercial Code on the Future of Information and Commerce, 13
BERKELEY TECH. L.J. (forthcoming Dec. 1998).

[ ]112. Last spring, editors from both the
California Law Review and the Berkeley Technology Law Journal met
to discuss how to allocate the papers between the two journals. The principal
criteria for allocation were thematic congruence and the degree of completion
of the papers (the California Law Review has a more time-intensive
publication process and had to complete several stages of its process by May).
I am deeply grateful to both the editorial boards of these journals and to the
authors of the Articles and Comments for their dedication to making the written
Symposium as great a success as the live Symposium.